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KUALA LUMPUR (Dec 21): Kimlun Corp Bhd is buying an 11.734ha freehold agriculture land in Pulai, Johor, from UEM Sunrise Bhd for RM82.1 million, to develop commercial properties.
The purchase is being undertaken via its indirect wholly-owned unit Kii Morris Sdn Bhd, which inked the sale and purchase agreement with UEM's unit Nusajaya Greens Sdn Bhd yesterday, according to the group’s filing with Bursa Malaysia.
Kimlun will finance the buy using internal funds and/or external borrowings. Assuming that RM50 million or some 60% of the purchase consideration is financed via external borrowings, Kimlun said its gearing, at 0.06 times as at Dec 31, 2016, is expected to increase 0.09 times.
The proposed acquisition, it added, provides an opportunity for the group to expand its landbank and enhance its future revenue and earnings.
The group plans to apply to the Johor state authority to convert the land from agriculture use to commercial within a year after the acquisition is completed.
As the development potential has yet to be detailed or finalised, the total development revenue or cost, and more cannot be readily ascertained, it said.
It expects the proposed acquisition to be completed in the fourth quarter of 2018.
Kimlun shares closed unchanged at RM2.25 yesterday, with a market capitalisation of RM721 million. Likewise, UEM Sunrise closed unchanged at RM1.05, with a market capitalisation of RM4.76 billion.
This article first appeared in The Edge Financial Daily, on Dec 21, 2017.
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